EFFECTS OF STRATEGIC COMPREHENSIVE AUDIT PROCESS AND AUDIT …
Transcript of EFFECTS OF STRATEGIC COMPREHENSIVE AUDIT PROCESS AND AUDIT …
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EFFECTS OF STRATEGIC COMPREHENSIVE AUDIT PROCESS AND
AUDIT SUCCESS OF TAX AUDITORS (TAs) IN THAILAND Amarit Sompong1, Phaprukbaramee Ussahawanitichakit2, and Suparak Janjarasjit3
Abstract: The audit business operation under a high competitive environment requires the audit
process comprehensive mixed strategy which progressively contributes auditors’ survival. This
research investigates the strategic comprehensive audit process relevant to audit in excellent
practice, report quality, information reliability and success. The sample group were tax auditors
in Thailand. According to the multiple regression hypothetical testing, the finding revealed that
the audit success related to practice excellence and information reliability. Those generated from
tax auditors competency towards each dimension of strategic comprehensive audit process to
audit work. However, there was no relationship shown between the audit report quality and
success. Stemming from this research outcome, the antecedent variables and moderating
variables should be concerned for further study.
Keywords: Strategic Comprehensive Audit Process (SCAP) , Audit Practice Excellence (APX) ,
Audit Report Quality (ARQ), Audit Information Reliability (AIR), Audit Success (ASS)
1. Introduction
The audit process is a preliminary activity
which consists of planning the audit, risk
assessment procedures, risk response, and
reporting, but the audit process is an
effective means to process a combination of
people, processes and technology to achieve
the best audit practices (Chow, Ho & Mo,
2006). The best audit practices require audit
management. An auditor needs to develop
his/ her comprehensive strategic auditing
process for a description to define the scope,
duration, guidelines for auditing and
resources needed for the audit under the
terms of the International Standard and
Auditing edition No. 300. Therefore, the
strategic formulation is important to the audit
process development through strategic and
tactics. It also contributes to corporate
productivity, profitability and business
success (Abraham, 2005; Bowman & Helfat,
2001). Such strategies need to analyze the
business environment, both inside and
outside, in a systematic way for firms that
can be adjusted to the business operations of
the company and achieve compliance
(Jackson, 1991). Moreover, the
implementation of a comprehensive strategy
is an integrative process and products of
1 Amar i t Sompong, a Ph.D. (Candidate) in Accounting at Mahasarakham Business School, Mahasarakham
University, Thailand; M.S. (Accounting) f rom Thammasat University, Thailand in 2003
2 Associate Professor Dr. Phaprukbaramee Ussahawanitchakit, a lecturer in accounting, Mahasarakham Business
School, Mahasarakham University, Thailand; Ph.D. from Washington State University, USA in 2002
3 Dr. Suparak Janjarasj i t , a lec turer in account ing, Mahasarakham University, Thailand, Ph.D. from
Washington State University, USA
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the company's resources to achieve
competitiveness and competitive advantage
(Schendel & Hofer, 1979). Thus, the
auditor must develop a strategy to ensure
that conducting all audit activities within
the company is worked (Bani-Ahmed & Al-
Sharairi, 2014). Kizirian, Mayhew and
Sneathen (2005) found that an auditor's
comprehensive management influenced the
planning and risk assessment for auditing
affected the audit report.
In particular, the quality of the strategic
comprehensive audit process is derived
from the knowledgeable and independent
auditors. The auditors develop their
knowledge towards the investigative
process to obtain evidences with
sufficiency and reliability. Qualities arisen
from the strategic comprehensive audit
process quality with one’s team can make
the right decisions during the audit with
credible evidences; then, leading to
accurate comments on the audit reports.
The quality of audit practices presented in
the report becomes credible and beneficial
for readers. The auditors need to improve
the audit process for continually motivating
and changing the audit team’s behavior as
to perform better. (Hammersley, 2011).
Moreover, the auditors need resources to
work with the allocation methods that are
efficient and effective (Knechel, Rouse, &
Schelleman, 2009). Brown and Blackmon
(2005) suggest that a operational method of
employees’ involvement in a strategy has
become competitive advantage for a
company.
Due to the constant change of the
environment at current, businesses and
competitors are challenged to comprehend
customers’ needs. The pressure from
customers has been increasing in business
service sector as well as the delivery of
value-added products among competitors
(Baker, 2003). Concernng a a member of
the Asean Economic Community (AEC),
Thailand –a group of ASEAN countries
also has a common goal of economic
integration in the marketing economy and
production in late 2015 (Ledda, 2012). In
view of AEC, the accounting profession
requires a sphere of liberalization. As a
result, the competition of accounting
profession among ASEAN workforce has
been increasing in the labor market either
foreign or resident workers in Thailand.
Auditors will have an impact on fee,
competition increased, and information
reliability (Kleimann, 2013) . Concerning
the atmosphere of competitive profession,
Thai auditors need to adjust strategies of
audit processes towards their own
capabilities, lower cost, and timely
achievement for a competitive advantage
(Niezen & Weller, 2006). The joint strategy
audit process formulation allow the auditors
understanding and having a focus on the
practice exam to achieve this goal by
implementing the strategy. This is the
capacity development of the auditor
working with specific expertise and achieve
competitive advantage (Floyd &
Wooldridge, 2000). It is important to
contribute to the operational performance in
both short and long term (Kunc &
Bandahari, 2011). It was unexpected that
researches about audit process had studied
only in Europe or developed nations
especially in larger companies (Manita,
Elommal 2010). Besides, there was not any
research about the caliber of the audit
process via those areas apparent in Asia
(Krishansing 2011). Therefore, this
research is developed to examine the effects
of the strategic comprehensive audit
process to audit success of tax auditors in
this developing country, Thailand. For
those reasons, this study aimed to initially
applied the strategic comprehensive audit
process in the developing country in Asia.
Thus, this research intended to study the
effects of strategic comprehensive audit
process on the audit success of tax auditors
in Thailand. This research was structured in
4 steps as follows. The first section
provided the description on the origin of
strategic comprehensive audit process and
its consequence. The second section was
the research methodology and design. The
third section showed the findings. The
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conclusions and suggestions were finally
drew at the end of the paper.
2. Literature Review and Hypotheses
Development
- Strategic Comprehensive Audit
Process (SCAP)
The strategic comprehensive audit
process (SCAP) is the process of
determining the scope, timing, knowledge
of the auditor, necessary resources and
other factors that are significant to the
auditor under the agreement. Thus, strategic
comprehensive audit process is a method of
auditing success on the environment of
turbulence or changeable economic policy
for competitive advantage and sustainable
success for auditors. The audit process
follows auditing standards that can entirely
be summarized as preliminary activities,
planning the audit, risk assessment
procedures, risk response, and reporting
(Goppelt, 2002). Hyatt and Prawitt (2001)
characterized the audit process by
comprising the best practices and design
tools for decisions-making about building
confidence and consistency, directing,
controlling the operation, and reducing
discretion in decision-making. Beaulieu
(2001) found the relationships between risk
assessment and planning in the audit with
the decision-made through comprehensive
management. Fafatas (2010) stated that a
large audit firm required more resources
and was investing in resources that
significantly affected the quality of
auditing. Adelaja (2009) showed that the
best audit method was positively associated
with audit reports accepted by the public.
The auditors were required to show ethical
behaviors to ensure the best auditing
method. Additionally, various computer
assisted audit tools and techniques have
been developed to enable the auditor
showing the audit information, software
and computer accounts. General inspection
is one of the most commonly used types of
technology-assisted audit implementation
(Singleton, 2006). Thus, the strategy can
lead auditors to fairly compete in the audit
market (Tegarden, Sarason, Childers &
Hatfield, 2005). The strategy can generate
auditors to understand better and focus on
practice exam for the the goal of auditing
achievement (Roberts & Dörrenbächer,
2012). The concept of strategic
cetomprehensive audit process (SCAP)
combines audit prcess and strategy
together. The SCAP in this research,
subsequently, is defined as the process of
determining the scope, timing, knowledge
of the auditor, necessary resources and
other factors that are significant to the
auditors under the agreement. The SCAP
motivates qualities and affects audit
performances.
Thus, the auditors need to improve the
audit process to continuously motivate and
change the audit team’s behavior to obtain
better performance, There is a method to
control the audit for making quality of audit
performance (Francis, 2011). In line with
all above reviews, this research examines
the effects of the strategic comprehensive
audit process. Such process consists of five
dimensions: audit planning efficiency,
enterprise risk analysis integration, audit
resource allocation, best audit method, and
technology-assisted audit implementation
affecting consequences. The hypothesis of
the study is the strategic comprehensive
audit process positively associated with
audit success. Hence, the conceptual
model of the study is presented in Figure 1
below.
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Figure 1: A Conceptual Framework of Strategic Comprehensive Audit Process and Audit Success
- Audit Planning Efficiency (APE)
The audit plan begins with
characteristic, timing, scope of planned risk
analysis, and planned audit methods. The
auditors develop the plans and strategies
with effective audits in the plans to help
solving problems and to create neutrality
and fairness of giving opinion on the
reliable and accurate audit report (Mani,
2000). In addition, the audit plan should be
designed towards manner accommodating
to the environment changed overtime that
help to increase the efficiency and
effectiveness of the audit (Ludwig, 2000).
The Audit Planning Efficiency (APE) is
defined as clarity in determining the nature,
scope, timing, risk assessment methods,
and approaches to audit with worthy used
resources in accordance with the purposes
of the audit and the audit profession
standard. APE helps reducing unnecessary
procedures, data collection, the cost of
monitoring and improving operation by
means of reliability impacted to the
resulting efficiency and be useful to the
users (Arel, Beaudoin & Cianci, 2012).
These ideas lead to the following
hypotheses:
H1a-c: Audit planning efficiency would be
positively related to (a) audit practice
excellence, (b) audit report quality, and (c)
audit information reliability.
- Enterprise Risk Analysis
Integration (ERI)
The risk assessment is gathering
amounts of sufficient evidences to identify
the risks that actual business customers
used in risk assessment and compliance
audits (Bedard, Graham & Jackson, 2005).
Auditors are required to understand the
customers as a basis to assess the overall
risk of the customers (Salterio & Weirich,
2001). In this research, Enterprise Risk
Analysis Integration (ERI) is defined as the
combinations among methods, analyses,
and observations. All of those are
thoroughly reviewed to determine the
probability displaying information contrary
to the facts which are material to the
financial statements and the executives who
have approved it. The former studies had
H1a-c(+)
H2a-c(+)
H3a-c(+)
H4a-c(+)
H5a-c(+)
Control variables:
-Gender
Strategic Comprehensive Audit Process
- Audit Planning Efficiency
- Enterprise Risk Analysis Integration
-Audit Resource Allocation
-Best Audit Method
-Technology-Assisted Audit Implementation
Audit Success
Audit Practice
Excellence
Audit Report Quality
Audit Information
Reliability
H6(+)
H7(+)
H8(+)
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showed the ERI influent on the subsequent
audit planning, financial report decision
making, an auditor’s opinion in the auditing
report and audit performed (Blay, Sneathen
& Kizirian, 2007). Subsequently,
hypothesis 2 can be showed as:
H2a-c: Enterprise risk analysis integration
would be positively related to audit practice
excellence, (b) audit report quality, and (c)
audit information reliability.
- Audit Resource Allocation (ARA)
The allocation of the resources refers to
the way of resource management with
operational performance sufficiency as well
as more effectiveness through supportive
information systems to ensure quality
(Khamkanya & Sloan, 2008). The auditors
need resources to work with the allocation
methods efficiently (Knechel & Sharma,
2012). This research defines Audit
Resource Allocation (ARA) as the resource
allocation method meeting the plan of
environmental monitoring and facilitating
an operational efficiency audit in
accordance with auditing purposes. The
former research showed that a large audit
firm needed to have more resources and
invest in human resources under
changeable environment through
significant affection on the quality of
auditing (Fukukawa, Mock & Wright,
2006). These ideas lead to posit the
following hypothesis:
H3a-c: Audit resource allocation would be
positively related to (a) audit practice
excellence, (b) audit report quality, and (c)
audit information reliability.
- Best Audit Method (BAM)
In line with the International Standard
on Auditing No. 200, the auditors must
comply with auditing standards and other
auditing method to achieve the purpose of
that provision. The auditing standards
contain an impact on auditor behavior,
inspections, enforcement and firm
methodologies (Burns & Fogarty, 2010).
Additionally, the ethical issue of the
external auditor generates the value of the
company accepted by the stakeholders
(Ionescu, 2009). In this research, Best Audit
Method (BAM) is defined as an excellent
practice guide based on the auditing
standards and regulations for the judgment.
Such method also complies with the
extreme situation to achieve the objective
audit plan and reliable report. The audit
performs under auditing standards,
professional skepticism, ethical behavior,
independence and good governance
achievement affected the audit efficiency
and the quality of the financial statements
(Coppage & Shastri, 2014). Thus, the
hypothesis are represented as follow:
H4a-c: Best audit method would be
positively related to (a) audit practice
excellence, (b) audit report quality, and (c)
audit information reliability.
- Technology-Assisted Audit
Implementation (TAI)
Computer-assisted auditing techniques
are audit tools and techniques used to help
completing the review of external and
internal corporate financial reporting and
internal control systems. Audit
technologies generate the efficiency and
effectiveness of the audit job (Curtis &
Payne, 2008). An auditing by computer
reduces the costs incurred an audit and
improves the audit quality (Banker, Chang
& Kao, 2002).
In this research, Technology-Assisted
Audit Implementation (TAI) is defined as
the computer skills and contemporary
technology in an auditing process to
encourage greater operational efficiency
and effectiveness. According to Williams
& Shah (2013), technologies took part in
achieving the best performance on
competition towards working standard
process in allocating resources to reach
performances, undoubtedly. These ideas
lead to posit the following hypothesis:
H5a-c: Technology-assisted audit
implementation would be positively related
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to (a) audit practice excellence, (b) audit
report quality, and (c) audit information
reliability.
- Audit Practice Excellence (APX)
The best practices can be defined as
excellent strategy, business operations and
stakeholders related to the performance
reviewed by the evaluation and a proven
business excellence model (Mann,
Adebanjo & Tickle, 2011). Dennis (2000)
described the best practices through four
important steps in achieving performance
monitoring. Firstly, the efficacy of the audit
achievement depends on auditor age and
their amount customers. Secondly, keeping
customers and employees, can enhance
audit efficiency. Thirdly, proper planning is
critical to performance monitoring. Finally,
the survey study revealed that a relationship
to determine the level of risk was
significantly enhances performance.
Thus, Audit Practice Excellence
(APX) is defined as how operations are in
accordance with a plan by specialization,
more wise resource usage, and achievement
of excellent professional standards. For
Edvardsson and Enquist (2011), service
excellence meant providing an excellent
quality management system and exceeding
the expectations of customers, resulting in
customer satisfaction and loyalty to the
company. These ideas lead to posit the
following hypothesis:
H6: Audit practice excellence would be
positively related to audit success.
- Audit Report Quality (ARQ)
Audit reports need to validate the
business because users prefer the report
audit providing assurance on the financial
statements of the company (Adiloglu &
Vuran, 2011). The report of an auditor's
opinion represents the validity, fairness and
compliance with accounting standards and
legal requirements of the financial
statements (Jovkovic, 2014). For audits of
companies, the opinion may be an
unqualified opinion in accordance with a
qualified opinion or an adverse opinion
(Knapp, 2011). Opinions are qualified to
receive financial statements presented
accurately in compliance with accounting
standards and legal requirements (Soltani,
2007). The auditors are responsible to
consider fraud in an audit of financial
statements (Popoola, Che-Ahmad &
Samsudin, 2014). The Audit Report Quality
(ARQ) is defined as appropriateness to
reliably express an opinion in a situation
and provide significant assurances to
stakeholders that are timely, cost effective,
and useful in making economic decisions.
The qualified report may signify investors
for managers as good stewards of the
company. In addition, the report has
directly related to stock prices and the
market value that effecting the wealth of
business (Jackson, Moldrich & Roebuck,
2008). The auditor's report adds credibility
to the financial reporting to ensure the
accounting statements in compliance with
general acceptance and accuracy. Those
related to acceptable audit and resulted in
more customers (Olowookere, 2011).
Hence, it can be hypothesized as:
H7: Audit report quality would be
positively related to audit success.
- Audit Information Reliability (AIR)
The qualitative characteristics are
features that make the data useful to the
users based on the concept of the
International Accounting Standards Board
(IASB) and the Financial Accounting
Standards Board (FASB). Those focus on
the first couple –the “Relevance” and
“Credibility” as features which are
identified importantly and accurately
(Christensen, 2010). During the
implementation of these standards, the
auditors provide the reliability of
accounting data; then, users would have
better decisions (Maines & Wahlen, 2006).
Thus, Audit Information Reliability (AIR)
is defined as information from the audit
report that provides reasonable assurance,
accuracy, and completeness, also accepted
by the stakeholders. In view of Duréndez
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Gómez-Guillamón (2003), the useful audit
was relevant to information on the auditing
decision-made to grant a loanor investment
to a company. These ideas lead to the
following hypothesis:
H8: Audit information reliability would be
positively related to audit success.
- Audit Success (ASS)
Measuring the success of the operation
can be assessed by income, including
company size and business expansion (Van
Praag, 2003). The increased size of the
business investment represents the
sustainability of the business (Cader &
Leatherman, 2011). Moreover, the audit
success is a reputable company with less
litigation and higher client valuation
(Wooten, 2003). Audit success determines
confidence to the financial statements
through professional auditors to achieve
quality in the implementation of audit
processes. Those ensure the fulfillment of
the audit profession of their responsibility
towards all the parties concerned. Finally,
audit success becomes the competitive
advantage factor among audit firms due to
competition surrounded by them (Scott &
Pitman, 2005). In this research, Audit
Success (ASS) is defined as the
performance achieved by auditing which
generates confidence among users. Those
relate to others and are recognized by the
accounting professionals.
3. Research Methodology
3.1 Sampling, data collection
procedure and method
The research employs a questionnaire as
the instrument for collecting data.The
population was chosen from the database
list of the Revenue Department, Ministry of
Finance in Thailand. According to the list
of the Revenue Department, Ministry of
Finance as of May 21st, 2015, there were
2,963 tax auditors (TAs) around Thailand.
As the tax auditor’s right, an auditor is able
to audit, certify the accounts and audit
report of small partnership entity with up to
5 million Baht grants, total assets of 30
million Baht, and total revenue of 30
million Baht (Kawatkul, 2001). The
context of tax auditors is interesting
because most of the previous auditing
studies always focused on the role of the
certified public auditors of a big audit firm,
especially in the developed countries.
However, a number of tax auditors in
Thailand had also been increasing (Gunby,
2009). As the research instrument of data
collection, the questionnaire was measured
by a five-point Likert scales ranging from 1
(strongly disagree) to 5 (strongly agree).
The 1,765 questionnaires were directly
distributed by mail to the tax auditors. 211
of them were responded, completely and
acceptably. The non-response bias problem
were tested. The results revealed the
nonproblematic in this issue. Moreover, the
validity and reliability of the questionnaire
were identified. Table 1 shows the factor
loading of each construct ranging from
0.599 to 0.907 that presents a value higher
than 0.40. This indicates an occurrance of
the construct validity.
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Table 1: Validity and Reliability Testing Output
Constructs Factor
Loadings
Alpha
Coefficient
Audit Planning Efficiency (APE) .647 - .869 .835
Enterprise Risk Analysis Integration (ERI) .620 - .886 .831
Audit Resource Allocation (ARA) .599 - .837 .812
Best Audit Method (BAM) .692 - .857 .823
Technology-Assisted Audit Implementation (TAI) .759 - .891 .900
Audit Practice Excellence (APX) .683 - .840 .821
Audit Report Quality (ARQ) .782 - .907 .907
Audit Information Reliability (AIR) .634 - .878 .877
Audit Success (ASS) .782 - .886 .876
3.2 Statistical techniques
The statistical techniques include factor
analysis, variance inflation factor,
correlation analysis, and regression
analysis. The Ordinary Least Squares
(OLS) regression analysis is used to test all
hypotheses to follow the conceptual model.
Thus, all hypotheses in this research are
transformed into four equations. The details
of each equation are presented as follows.
Equation 1: APX = 1 + 1APE+ 2ERI+
3ARA + 4BAM + 5TAI+
6GD+ 7AE+
Equation 2: ARQ = 2 + 8APE+ 9ERI+
10ARA + 11BAM +
12TAI + 13GD+ 14AE+
Equation 3: AIR = 3+ 15APE+ 16ERI+
17ARA + 18BAM + 19TAI
+ 20GD+ 21AE+
Equation 4: ASS =4+ 22APX+
23ARQ+ 24AIR + 25GD+
26AE+
Cronbach’s alpha coefficients resulted in
between 0.812 and 0.907. Those indicated
that the reliability level of these constructs
were accepted (Nunnally & Berstein,
1994).
Table 2 demonstrates the descriptive
statistics, including the means and standard
deviation. In general, the range of mean
scores for all constructs is 3.995 – 4.310.
The standard deviation value of the
strategic comprehensive audit process
shows at 0.427–0.569. Regrading the
results the ARQ and AIR shows their
significant and positive correlation at r =
.867. According to Berry and Feldman,
1985, the value of intercorrelations among
independent variables less than 0.9 is
acceptable.
Therefore, the problem of
multicollinearity apparent in this analysis
becomes inconsiderable. The statistical
techniques include factor analysis, variance
inflation factor, correlation analysis as
shown in Table 2. Besides, the Ordinary
Least Squares (OLS) regression analysis is
used to test all hypotheses towards the
conceptual model as presented in Table 3.
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Table 2: Descriptive Statistics and Correlation Matrix
Variabl
e APE ERI ARA BAM TAI APX ARQ AIR ASS GD
MEAN 4.31 3.99 4.2 4.12 4.11 4.05 4.2 4.22 3.99 0.63
S.D. 0.42 0.51 0.42 0.50 0.55 0.48 0.47 0.49 0.56 0.48
APE 1
ERI .579**
* 1
ARA .613**
*
.580**
* 1
BAM .645**
*
.594**
*
.734**
* 1
TAI .478**
*
.461**
*
.509**
*
.599**
* 1
APX .601**
*
.564**
*
.592**
*
.696**
*
.605**
* 1
ARQ .568**
*
.528**
*
.574**
*
.652**
*
.459**
*
.740**
* 1
AIR .570**
*
.506**
*
.646**
*
.655**
*
.431**
*
.736**
*
.867**
* 1
ASS .448**
*
.447**
*
.543**
*
.607**
*
.486**
*
.684**
*
.600**
*
.642**
* 1
GD 0.006 0.124 0.036 0.064 0.015 0.01 0.031 0.062
-
0.03
1
1
*** Correlation is significant at the 0.01 level (2-tailed).
4. Results and Discussion
The findings in Table 3 show that APE
provides positive significant effect on the
APX (H1a:β1= .179, p < .01), ARQ (H1b:β7
= .166, p < .01), and AIR (H1c:β13 = .152,
p < .05). The results show that APE helps
reducing problems in audit practice and
gives equitable opinions on the financial
statement in the audit report. This also
showed the reliability and relationship of
the audit information for any users on
decision-making (Bani-Ahmed & Al-
Sharairi, 2014). Thus, Hypotheses 1a - 1c
are supportive among another. In light of
ERI (Hypotheses 2a - 2c), the results
indicate that ERI has positive significant
effect on APX (β2 = .130, p < .05), and
ARQ (β8 = .134, p < .05). The risk analysis
is influent on APX and ARQ, which
identify the customer business’s actual risk
affection on audit performance of material
misstatement. Furthermore, ERI represents
the auditor’s opinion instead of the
misstatement that are not the material for
the whole financial statements (Blay,
Sneathen & Kiziran, 2007). Hence,
Hypotheses 2a and 2b are supported.
Nevertheless, ERI has no significant effect
on AIR (β14 = . 062, p > . 10). In fact, the
information reliability is important for an
organization, still it may reveal the value
limited by the organization’s policy.
Similarly, a firm with high individual
auditor leaves risk propensity with effect on
the low risk analysis leading to low quality
of audit (Al Khattab, 2006). Therefore,
Hypothesis 2c is unsupportive.
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Table 3: Regression Analysis Output
Independent Variables Dependent Variables
APX
Eq.1
ARQ
Eq.2
AIR
Eq.3
ASS
Eq.4
Strategic Comprehensive
Audit Process:
Audit Planning Efficiency
(APE: H1a-c)
.179***
(.065)
.166**
(.072)
.152**
(.069)
Enterprise Risk Analysis
Integration (ERI: H2a-c)
.130**
(.061)
.134**
(.068)
.062
(.065)
Audit Resource Allocation
(ARA: H3a-c)
.035
(.071)
.097
(.079)
.276***
(.077)
Best Audit Method
(BAM: H4a-c)
.327***
(.077)
.365***
(.086)
.317***
(.083)
Technology-Assisted Audit
Implementation (TAI: H5a-c)
.247***
(.058)
.055
(.065)
.006
(.063)
Audit Practice Excellee
(APX: H6)
.456***
(.076)
Audit Report Quality
(ERI: H7)
-.047
(.103)
Audit Information Reliability
(AIR: H8)
.356***
(.103)
Control Variables
Gender (GN)
-.059
(.095)
-.022
(.106)
.058
(.102)
-.113
(.101)
Adjusted R2 .570 .470 .502 .510
Maximum VIF 2.906 2.906 2.906 4.588
*** p<0.01, ** p<0.05, * p<0.10, Beta coefficients with standard errors in parenthesis
The relationship between ARA and AIR
has a significant positive effect at β15 =
.276, p < .01, towards the consistency of
Snell (2011) –in tems of ARA, a method to
improve audit program and increase
information reliability for auditing. Thus,
Hypothesis 3c is supported.
On the contrary, the evidence reveals
that ARA is insignificant through the effect
on APX (β3 = .035, p> .10), and ARQ (β7 =
.097, p > .10). According to Nelson and
Tan (2005), the resource allocation step
does not provide audit practice efficiency
because some business audits have limited
approaches. Therefore, Hypotheses 3a and
3b are unsupportive.
In regard to BAM (Hypotheses 4a - 4c),
the results indicate that BAM has a
significant effect on the APX (β4 = .327, p
< .01), ARQ (β10 =.365, p < .01), and AIR
(β16 = .317, p < .01). Those can be seen that
BAM helps providing audit operation
efficiency and quality of financial
statement, containing information
reliability for decision-making to the
stakeholders. Moreover, the auditors has
professed skepticism and independence on
the audit method, depending positively on
the performance of the audit quality
(García, Cuadrado, and Eslava, 2011).
Therefore, Hypotheses 4a - 4c are
supported.
Concerning the relationship of TAI
(Hypotheses 5a-5c), the results indicate that
TAI positively relates to APX (β5 = .247, p
< .01). In consistency with Morris and
27
Venkatesh’s study (2010), technology
encourages the auditor practice through the
audit software to generate audit objective
achievement. Hence, Hypothesis 5a is
supported.
On the other hand, TAI shows
insignificant effect on ARQ (β10 = .055, p >
.10). Similarly, the previous research
showed that the auditors might use less
technology in the audit process because
they were lack of IT knowledge and skills
(Ismail &Abidin, 2009). TAI, also, shows
insignificant effect on AIR (β17 = .006, p >
.10). However, the previous research
argued that the traditional auditors with less
technology usage for audit evidence
undoubtedly led to less information
reliability (Caster & Verardo, 2007).
Hence, hypotheses 5b and 5c are
unsupportive.
The correlations between the mediating
variables and the dependent variable
indicates that APX shows significant and
positive relationships with ASS (β19= .456,
p < .01). In reference to Mittendorf (2010),
the audit practice affected opinions on the
audit report. In other words, none of any
report distortion in equilibrium and
customers had generated loyalty the
achievement of the audit success. Hence,
Hypothesis 6 is supported.
In the interrim, the results also indicate
that ARQ does not provide a significant
effect on ASS (β20 = -.047, p > .10). In
relation to the former studies, those can be
seen that that the audit report has no effect
on benefit of stakeholder’s decision. By
that reason, the opinion of a tax auditor
contributes more confidence on tax
payment to the revenue department rather
than financial information sent to the
stakeholders (Antonio, 2003). Thus,
Hypothesis 7 is unsupportive.
For Hypothesis 8, AIR shows a
significant and positive relationship to ASS
(β21 = . 356, p < . 01) . In this regard, the
credibility information presents the audit
quality because the stakeholder understands
the information and uses it for making
decisions to economize (Cox, 2007) .
Hence, Hypothesis 8 is supported.
Concernng the control variable, there is
not any relationship shown either in each
factor or the gender: APX (β6 = - .059, p >
.10), ARQ (β12 = - .022, p > .10), and AIR
(β18 = .058, p > .10). Meanwhile, the results
indicate that gender does not affect ASS
(β22 = -.113, p > .10). Hence, gender factor
does not impact on ASS.
With regard to the multicollinearity
problem, VIF was used to test the
correlation among the independent
variables ( See Table 3). According to the
reseach outcome, the maximum value of
VIF at 4. 588 (> 10) indicated that there
were no significant multicollinearity
problem confronted in this study (Hair,
Black, Babin, Anderson, & Tatham, 2006).
5. Conclusions and Suggestions
By the reason of more competitive and
high expectation from customers in the
audit service business, the strategic
comprehensive audit process becomes
necessary for tax auditors. It is an auditing
instrument to support a business
environment that gradually changes
throughout the time. The auditors,
subsequently, need to operate their
obligation efficiently and competitively.
This research aimed to examine the effects
of strategic comprehensive audit process to
audit success of tax auditors in Thailand.
The study used a new framework of
strategic comprehensive audit process.
There were five dimensions towards the
independent variables through the sampling
group of the tax auditors in Thailand. As
the research tool, the total of 211 complete
questionnaires were responded. The results
showed that strategic comprehensive audit
process, audit planning efficiency,
enterprise risk analysis integration, audit
resource allocation, best audit method, and
technology-assisted audit implementation
were positively influential on its
consequences; those were, audit practice
excellence, audit report quality, and audit
information reliability. In particular, audit
28
planning efficiency and best audit method
became the key element of strategic
comprehensive audit process to obtain
those consequences. The audit practice
excellence and audit report quality
accordingly affected the audit success.
There were several managerial
implications implied by the study. Firstly,
it revealed that tax auditors should merge
strategies in their audit process to increase
competitive advantages in an intense audit
market. Secondly, audit planning was the
essential step of audit process that could
significantly reduce risks. However, the
achievement of those required audit
knowledge and expertise. Thirdly, the
research indicated the tax auditors’ focuses
on vision, accounting and audit standards,
and technology support to achieve the best
audit practice. Tax auditors should also
accumulate their audit experience and
utilize it during the audit process design.
Furthermore, the study revealed that
strategic comprehensive audit process was
important for audit consequence and audit
success. Therefore, tax auditors should
thoroughly understand, manage, and utilize
strategic comprehensive audit process.
Due to the limitation of the population in
this research, only organisations in
Thailand, the study of different effects of
strategic comprehensive audit process and
audit success of tax ausitors issues between
Thailand and other countries should be
explored for further studies. In other words,
to improve the level of reliable results, the
future researches need to collect data from
other populations, mediators and
moderators with respect to a framework of
the effects on strategic comprehensive audit
process and audit success of tax ausitors.
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